Q2 Earnings Review: NIO, Inc (NYSE: NIO) Shows EPS Beat, Strong Growth in Deliveries, and Positive Q3 Outlook

Q2 Earnings Review: NIO, Inc (NYSE: NIO) Shows EPS Beat, Strong Growth in Deliveries, and Positive Q3 Outlook

A leading electric vehicle (EV) manufacturer, NIO, Inc (NYSE: NIO), reported impressive fiscal second-quarter results, showcasing strong growth across key metrics. The company reported a quarterly revenue of 17.45 billion yuan ($2.40 billion), representing a 98.9% year-over-year increase and a 76.1% jump from the previous quarter. This exceeded market expectations, where analysts had anticipated revenue of $2.44 billion.

On the earnings front, excluding share-based compensation expenses, the company posted an adjusted loss per share of (2.21) yuan or ($0.30), compared to (3.28) yuan in the year-ago quarter and (2.39) yuan in the first quarter of 2024. Analysts had predicted a loss of $(0.31) per share, meaning the company outperformed expectations in this regard, leading to a positive market response and a stock price increase.

Vehicle deliveries were a standout in the report, with 57,373 units delivered during the quarter, reflecting an impressive 143.9% year-over-year increase and a 90.9% growth compared to the previous quarter. As a result, vehicle revenue surged by 118.2% year-over-year and 87.1% quarter-over-quarter.

In addition, the company delivered 20,498 vehicles in July 2024 and 20,176 in August 2024. This brings the cumulative total number of deliveries to 577,694 vehicles as of August 2024.

The company also demonstrated improved profitability, with its gross margin expanding to 9.7%, up significantly from 1.0% a year earlier and 4.9% in the previous quarter. The vehicle margin also showed strong growth, increasing from 6.2% a year ago to 12.2% in the current quarter.

As of June 30, 2024, the company held 41.6 billion yuan ($5.7 billion) in cash and equivalents, short-term investments, and long-term deposits, indicating a solid liquidity position to support its ongoing operations and growth initiatives.

Looking ahead, the company has provided a positive outlook for the third quarter of 2024. It expects to deliver between 61,000 and 63,000 units, representing a 10.0% to 13.7% year-over-year increase. Additionally, the company has guided revenue in the range of $2.630 billion to $2.707 billion, marking a 0.2% to 3.2% year-over-year growth, surpassing the market consensus of $2.54 billion.

Despite these promising results, NIO's stock experienced a 61% decline over the past 12 months, reflecting challenges in the broader Chinese EV market. The industry has been affected by weak domestic demand and trade-related pressures, though there is optimism for recovery due to recent government stimulus measures aimed at boosting passenger vehicle purchases. These initiatives are expected to support growth in the coming months.

NIO’s performance in the EV market, particularly in the premium segment, remains strong, with a significant market share in the high-end battery electric vehicle category. The outlook for the rest of the year suggests further growth, with strong demand for its innovative electric vehicles expected to continue.